California Cardrooms Go On Offensive Against Tribal Lawsuit Bill

A bill that would give standing for California Indian tribes to sue cardrooms to resolve their issues regarding the legality of cardroom table games is on the move. And cardrooms are going on the offensive before any further action is taken.

As the 2024 California legislative session began last week, SB 549 was assigned out of Rules purgatory and into the Assembly Governmental Organization Committee.

In anticipation of a committee hearing at the end of this month, more than 200 cardroom supporters gathered Tuesday in front of the Capitol Building in Sacramento.

“SB 549 is unnecessary and puts at stake the budgets of dozens of primarily underserved cities across the state during a $30+ billion state budget shortfall and recession,” said Kyle Kirkland, president of the California Gaming Association. “All to benefit a few wealthy gaming tribes who already do not pay state gaming or income taxes.”

While defending their games, cardrooms also are accusing California tribes of illegally offering craps and roulette. These games, in their traditional forms, aren’t allowed under state law.

“It’s kind of interesting how the cardroom narrative shifted over time from we’re not doing anything wrong to they’re trying to kill our business to turn a blind eye to what we’re doing because the tribes are doing something illegal and we can’t do anything about it,” said Viejas Band of Kumeyaay Indians Attorney General Tuari Bigknife. “One thing they’re not screaming out loud is what we’re doing is legal. They’re saying everything else.”

What California bill does

Tribes have long claimed that the way cardrooms offer blackjack and baccarat violates their exclusivity over banked card games.

Those are traditionally considered house-banked card games. Cardrooms contract with third-party proposition players who serve as the bank.

Tribes have attempted several lawsuits that were thrown out for lack of standing. This is because sovereign tribes generally can’t directly sue or be sued in state courts.

Last year, Sen. Josh Newman sponsored SB 549 to allow tribes a one-time exception to sue cardrooms over this particular issue. The bill does not permit any claims for money damages, penalties or attorney’s fees.

Prop. 26, rejected last year by voters, included similar language facilitating tribal lawsuits. However, voters were more likely rejecting the underlying in-person tribal sports betting bill.

“SB 549 was already overwhelmingly rejected by voters as it contains similar language and intent that was in last year’s Prop. 26,” said Keith Sharp, president of the California Cardroom Alliance. “More than one thousand cardroom employees live in Sen. Newman’s district. We are asking him to support his constituents and drop his bill that will negatively impact their jobs and communities.”

These games played by the cardrooms are recognized and regulated by the state. But the California Bureau of Gambling Control recently offered concept language for regulations prohibiting blackjack-style games and providing tighter restrictions on player-dealer rotations.

Bigknife said the draft regulations are a multiyear process sure to go to court on a cardroom challenge.

Complicating the issue, cardrooms employ 30,000 workers in the state and many cities rely on nearly $500 million in cardroom tax revenue.

Cardroom ad attacks tribal games

Rather than just sitting back and defending themselves from tribal attacks, cardrooms produced a fact sheet and will run advertisements alleging that tribes illegally offer craps and roulette.

According to the cardroom ad:

“Tribes want to sue card clubs for playing legal games approved by the Attorney General. Those same tribes illegally offer roulette and craps and cannot be sued.”

Cardrooms specifically call out Viejas, showing that the Viejas Casino website offers tutorials on playing craps and roulette at the facility.

Viejas has taken the lead in advocating for SB 549. Bigknife explained to PlayUSA how Viejas qualifies craps and roulette as banked card games.

Viejas craps does include two cubes, similar to dice, to simulate the Vegas-style craps play that excites patrons. But the number on the cube doesn’t dictate gameplay. It corresponds to a number on a table with a shuffled card. The card provides the value used in the game.

In “mystery card roulette,” there is a betting board similar to traditional roulette but no steel ball on the wheel. The wheel shuffles cards to different spots, so their placement is not fixed. Wherever the pointer lands, the card in the space at that moment is revealed. On that card is a number.

Cardrooms seem to be stating they aren’t the only ones who find creative loopholes to offer profitable games. And it wouldn’t be fair to allow tribes to sue them for their games while tribes can’t be sued for the games they offer.

Bigknife said the difference is tribes contend that cardrooms are violating their exclusivity by offering banked card games.

“We’re trying to get access to justice to enforce our rights,” Bigknife said. “If cardrooms had exclusive rights to craps and roulette, they might have a different argument. But that’s not the case.”

Assembly changes spark bill

Newman retitled SB 549 the Tribal Declaratory Relief Act and substituted in the current language last June. The bill had previously passed the Senate with a different topic.

After the bill passed through the Assembly Judiciary Committee, Rules Committee Chairman James Ramos, the only legislator who is a member of a California tribe, did not allow the bill to move forward to Assembly GO.

Although Ramos never stated his reasons, the Assembly GO chair last year wasn’t considered friendly to the bill. Asm. Miguel Santiago has Commerce Casino, the largest CA cardroom, in his district.

This year, Speaker Robert Rivas appointed Asm. Blanca Rubio to chair the committee. Rules, which has a new chair in Asm. Blanca Pacheco, then re-assigned the bill to Assembly GO on the second day of the session. Santiago now chairs the Communications and Conveyance Committee.

Cardrooms are preparing for a committee hearing by the end of January, though a date hasn’t been set. If the bill gets through that committee, it would go to the Assembly floor.

If passed by the Assembly, SB 549 would return to the Senate, where it would have to go through Senate Governmental Organization.

That committee is chaired by Sen. Bill Dodd, who tribes accused last year of having “repeatedly shown loyalty to cardrooms” during negotiations on a cardroom moratorium bill. Tribes did not like that Dodd allowed the previous cardroom moratorium to expire, forcing tribes to quickly reach a deal with cardrooms on a new one.